Venezuela's state-run oil company is in talks to buy the Argentine operations of Royal Dutch/Shell, Venezuelan President Hugo Chavez said Tuesday. Chavez, speaking with reporters during a visit to Buenos Aires, described the negotiations between Petroleos de Venezuela S.A., or PDVSA, and Shell as "advanced," calling them part of PDVSA's interest in expanding its Latin American operations.

Whether or not Venezuelan President Hugo Chávez is the next Fidel Castro, the leftist firebrand has mastered the Cuban's art of pushing the U.S.'s buttons--including the ones on our gas pumps. Venezuela is the U.S.'s fourth-largest oil supplier (15% of U.S. imports), a nearby and reliable source that few in Washington want to alienate. But the visit to Caracas last week by Chinese Vice President Zeng Qinghong was the latest reminder that Chávez, a sharp critic of U.S. foreign policy, wants to cut Venezuela's dependence on the U.S. market and start exporting to his oil-thirsty ideological ally, China. Talks are under way to build pipelines to pump Venezuelan crude to Pacific ports in Colombia and Panama for that very purpose.

In recent weeks Venezuela has begun selling crude and fuel oil to China, in some cases, according to people familiar with the deals, at a discount price to offset shipping costs and render the trade feasible.

Venezuela has enrolled Iran to help it accelerate a strategy to steer its oil exports to China and away from its traditional market of the US. A team of traders from Petróleos de Venezuela (PDVSA), the state-owned oil company, is to be trained in London by Iranian advisers in how to best place oil in Asian markets, according to industry sources.news.ft.com/cms/s/3221ed52-732d-11d9-86a0-00000e2511c8.htm

In short, what this says is that Hugo Chavez is literally daring the US to invade Venezuela. What's more, he is nearing the point of declaring a mutual defense pact which may not be far off. Given his recent sexual taunts of Condoleezza Rice and his widely publicized world travel, such a move is not inconceivable.

In other words: If the US attacks Iran, Venezuela will also consider itself attacked and that a state of war will exist. When and if that declaration occurs it will be considered one of the final moves before open warfare begins.

Note that Iran is Venezuela's closest partner in OPEC. Note also that Nigeria, which just received Iranian President al Khatami, announced today that it is signing deals with ExxonMobil and ChevronTexaco. This, even after Nigeria hinted that it was also doing deals with Iran and China. What the Nigerian government is doing is anybody's guess, but it is not unfair to suspect that they are getting all the money they can get as quickly as possible and that very little of it will actually benefit the Nigerian people.

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